The Logan Review

Earlier this week, the Logan Review was released by the Scottish Government.

It’s a deep dive into the whole Scottish tech ecosystem (including games), looking at how Scotland could provide greater support for tech businesses and create a more digitally literate, entrepreneurial and collaborative society.

The 89 page review looks into every aspect of the current ecosystem in Scotland, from the education system and the way companies are created, through to funding, finance and how to support new businesses from the point of creation, through to helping them scale in a global marketplace.

Recommendations for the Future

It’s one of the most astonishing pieces of research ever to come out of any government. If the 34 recommendations within the review are adopted, then it could have profound implications for Scotland’s future.

The review was undertaken by Mark Logan, one of the co-founders of SkyScanner, at the request of Kate Forbes MSP, the cabinet secretary for finance.

It takes a hard-headed, practical and holistic view of the tech sector and notes that, despite several notable successes, we as a country are not yet producing enough new digital start-ups to reaching the ‘tipping point’, where the whole marketplace becomes self-sustaining, making funding, recruitment, starting-up, growing and scaling simpler for everyone.

Up front, Mr Logan notes that until we reach that tipping point:

• There just aren’t enough companies to create a sustained learning and experiential environment
• The ecosystem is too small to attract outside talent
• The ecosystem doesn’t attract larger investors

All of which should sound familiar to many of the founders, CEOs and managing directors who run (or have attempted to run) businesses within the videogames sector.

National Approach

One of the most impressive aspects of the Logan Review is that it recognises and transcends many of the regional, sectoral or organisation-specific activities which have been used in the past. It states clearly up-front that a nationwide, cross-sector and truly collaborative approach is required.

It also recognises the need for long-term change and recognisable shorter-term benefits. So there are recommendations which would have an immediate impact, while far longer-term changes take place, which would offer a fundamental shift in key areas, such as education.

Computer Science != Rocket Science

The Logan Review is an illuminating (and occasionally eye-opening) read. For example, the way computer science is taught in high school is horrifying. It’s not treated the same way as maths or history, which begin in primary school and are a mandatory part of the curriculum. Computer science is currently optional and is in some cases taught by non-specialist teachers.

As a result the number of pupils choosing the subject is falling sharply (it could soon be less popular than wood working) and the diversity numbers are shameful (on average 84% of pupils studying the subject at Higher level are male).

Local Heroes

As counter examples, Mr Logan here notes some of the outstanding work being done in the area by teachers with the knowledge skills and passion to teach computing in an entirely different way – such as the (award-winning) Toni Scullion in West Lothian, as well as the broad range of extra curricular computing clubs, such as Coder Dojo and dresscode, which take place across the country.

At a university level, the review highlights there is little or no incentivisation to encourage an entrepreneurial mindset in students, or equip them with the skills they would need in order to found or join a start-up business.

One of the recommendations made for universities is the estabishment of summer schools, which would enable students to explore new business ideas, with help and support on offer to take them through the start-up process. The review specifically name checks the Transfuzer programme, run by Paul Durrant and the UK Games Fund, as an example of how this could be done successfully.

Sectoral Clusters Add Value

It also highlights the value of sectoral clusters, noting that while their area of interest cannot and should not be the strategic driver, their expertise within a given industry can add immense value to the national ecosystem goals contained within the review.

Some of the key recommendations from the review (listed in parentheses) include:

Creation of a Tech-Scaler National Backbone (1)

Scotland should create a nationwide network of Tech-Scaler centres.

A Tech-Scaler is an incubation facility that provides at minimum:

• Long-term, affordable, high-quality incubation space
• Free, high-quality foundational start-up education to its tenants
• Market square space that is free for all local tech meet-ups to use

The review recommends these are initially created in the six cities nationwide (Edinburgh, Glasgow, Aberdeen, Dundee, Stirling and Inverness)

The review also recommends that grant funding should be integrated into the network (4), so that acceptance into the network would simplify, or even automatically entitle the successful company to relevant grant(s).

Treat Computing Science like Maths or Physics (5)

This recommendation states, simply, that Scotland must treat Computing Science as it does Maths or Physics at secondary school level.

The review recognises the difficulties of this, noting that the teaching profession needs to attract more Computing Science (and related
disciplines) graduates into teaching. This means looking seriously at salaries, promoting teaching as a career to undergraduates and creating fast-tracks into teaching for Computing Science graduates

Here the review notes the excellent work being done by CodeClan in terms of rapid, high quality teaching, as a model for how this could be introduced.

There are also specific recommendations at this point, for industry partnerships to give pupils summer work experience (6), overcoming gender stereotyping (8) and supporting coding clubs at a strategic national level (7).

Adjust university incentivisation and funding to improve tech-entrepreneurial focus (11)

The review recommends improving the entrepreneurial skills of students in computing science (and by extension, related degrees such as games development), by changing the course funding model to one similar to clinical disciplines, where the need for funding provision beyond basic teaching is already recognised. Costs could be managed here by employing models similar to the existing Research Pool scheme to share programmes and initiatives across institutions, instead of replicating them at each individual university

Universities should be assigned a KPI to increase the entrepreneurial skills and knowledge of Internet Economy ‘start-up playbook’ amongst Computing Science students with classes covering:

• Internet-Economy best practice in product introduction and growth engineering.
• Fundamentals of Internet-Economy business operations.
• Case studies of multiple well-known tech start-ups and scale-ups, both successful and unsuccessful.

Joint start-up projects between Computing Science and Business school students, a national Transfuzer style summer school start-up programme (13) and incubation space available for students and recent graduates are also recommended.

Attraction of executive-level talent to Scotland (17)

Pre ‘tipping point’ attracting high level international talent to Scotland is difficult. In some cases the business sets up offices outside the country, to bring international staff on board. Over time, this can become the new focus for the business. This would provide a government bond to (means-tested) start-ups to support the 12-month salary costs and relocation costs of an executive who leaves a Scottish scale-up within the first two years of joining.

Reduction in inter-city rail travel costs (18)

As simple as this may sound, alongside plans to fundamentally change the face of education, there’s an immediate benefit to businesses across the country from this recommendation.

The costs of travelling from Edinburgh – Glasgow is, at the time of writing £4200 per year, which can seriously curtail companies from hiring employees from the closest other city. While the travel limitations to and from Dundee are so well known within the games sector, they don’t need repeated here.

Provide support for major Scottish tech conferences and local meetups (19/20/21)

Scotland plays host to two tech events with global reputations – EIE and Turing Fest. Recommendation 19 suggests greater support for them both in order to attract more international speakers, attract more international investment and open them up to non-Scottish Startups (recommendation 20). The review also suggest greater support for local meetups, through providing space free of charge, through the proposed Tech-Scaler network (recommendation 1).

Support and strategy for specific economic sectors (22)

The review acknowledges the value of sectoral focus and the power of domain clusters within an ecosystem (Fintech in Scotland for example). However the review notes that given the ongoing rapid evolution of the tech sector, the Scottish Government should not attempt to predict or force a comprehensive set of future winning sectors, but should instead provide grant funding support for industry-domain networks as they emerge and as the industry participants in those sectors organise themselves into those networks.

The Logan Review summarises this approach as “embrace what works and be hyper-alert to emerging strengths”.

Establish a strategy to exploit Scotland’s Diaspora (23)

There are expatriate Scots in executive positions within many of the world’s leading digital companies. Recommendation 23 suggests the Scottish Government generate a comprehensive, multi-year diaspora exploitation plan, following Ireland’s successful model, a country with very similar international brand assets to Scotland but that makes considerably more use of them.

Integrated Ecosystem Grant Funding

The Logan Review goes into detail of grant funds covering four areas that would support all of the other recommendations made:

• Foundational Talent Fund – providing funding to those talent funnel-wideners in the early stages of the ecosystem
• Tech-Scaler Start-Up Fund (26) – Providing targeted grant funding to technology start-ups
• Ecosystem Builders Fund (27) – Support for organisations that contribute to strengthening the ecosystem through peer networking and informal education
• International Market Square Fund (28) – To support those organisations that contribute to strengthening the ecosystem through large-scale market square events.

Investment Funding

Some fascinating recommendations here, which look at venture capital and equity investment. Given the general lack of this type of investment into Scotland’s games development sector, these points could create entirely new ways for games business to capitalise themselves.

This section recommends a far greater role for the Scottish Government, either directly, or via the public sector organisations, within the funding process. It suggests:

• Scottish VCs should partner with the Scottish Government on various joint initiatives (29)
• Explore the establishment of a Series A fund in a partnership between the Scottish Government, Scottish VCs and External Investors (30)
• Introduce an investment vehicle specifically supporting female founders (31)

(And can we pause here to say Hurrah to that?)

• Introduce an education/mentoring scheme for start-ups in funding models, venture capital, pitching
• Grant support for Scottish start-ups to support external raising expenses

• Maintain and publicise a live database of all angels and all start-ups in Scotland (this could in time extend into a specialised crowdfunding platform for angels and Scottish start-ups)

The review goes onto recommend a light touch governance model, in which bureaucracy is minimised and where all participating agencies and institutions should be strategically incentivised to deliver the programme outcomes.

You can – and should – read the whole review. You can find it here.

All in all, it’s pretty radical. It’s informed by a deep understanding of the tech ecosystem. It recognises the rapid evolution of different sectors and the volatility of various markets, and seeks to provide a high level strategy which will be effective not matter where the tech ‘economy’ takes us.

The Scottish Government’s response to the Logan Review will be included in the 2020/21 Programme for Government. The programme is published every year at the beginning of September and sets out the actions ScotGov will take in the coming year.

We have high hopes. This could, ladies and gentlemen, be a game changer.